In these times of rising interest rates, second mortgages or first mortgage refinancing might be just the thing to keep your housing costs from going through the roof. In a recent article in Parade magazine, How To Save on Your Mortgage, Lynn Brenner considered the question,
Will Your Mortgage Rate Go Up?
If you have a fixed-rate mortgage, you have nothing to worry about. But millions of home owners are sitting on a financial time bomb: Their monthly payments are preset to skyrocket sometime in the next 18 months. These owners have hybrid adjustable rate mortgages (ARMs), which start with a fixed rate for three to 10 years but later are adjusted annually.
Lets say you bought a house in 2003 with a $200,000 three-year hybrid ARM. For the first three years, your rate was about 3.8% and your monthly payment was $930. But this year, your rate could be reset to 7.3%, says Greg McBride, senior analyst at Bankrate.com, a personal finance site. That means your monthly payment could jump to $1,334.
Brenner goes on to recommend that, If you have an adjustable rate mortgage thats due to adjust this year or in 2007, consider refinancing. Taking out a new...
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